Jul. 7, 2013

TSU students line up to apply and check on the status of their student loans. / The Tennessean / File

Written by

Lexy Gross

The Tennessean

In this photo Thursday, April 25, 2013 Lucy Butler,15, getting ready to have her measles jab at All Saints School in Ingleby Barwick, Teesside, England, as a national vaccination catch-up campaign has been launched to curb a rise in measles cases in England. More than a decade ago, British parents refused to give measles shots to at least a million children because of a vaccine scare that raised the specter of autism. Now, health officials are scrambling to catch up and stop a growing epidemic of the contagious disease. (AP Photo/Owen Humphreys, PA) UNITED KINGDOM OUT - NO SALES - NO ARCHIVES / AP

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A quarter of the nation’s college students will be looking to Congress this month to make a decision regarding interest rates on federal student loans.

If Congress can find a way to lower interest rates that recently doubled — from 3.4% to 6.8% — on subsidized student loans, the increase won’t affect students taking out loans for the fall. A change in the subsidized loan program will affect about 26 percent of college students.

Recently, Sen. Lamar Alexander joined a group of senators to develop a solution to the rising student loan interest rates. The plan, the Bipartisan Student Loan Certainty Act, requires that for each academic year, all student loans issued be set to the U.S. Treasury 10-year borrowing rate plus 1.85 percent — a flat 3.66 percent interest rate.

This legislation would apply to all unsubsidized and subsidized undergraduate student loans.

Don Taylor, president of Automated Collection Services Inc., has worked for several years with debtors and graduates who have defaulted on federal student loans. Taylor said he thinks Congress will find a fix to the interest rate problem and doesn’t expect students will have to pay the new 6.8 percent rate.

“Some members of Congress want to keep interest rates low for now without finding a long-term solution,” Taylor said. “I think they should find a solution now.”